There are several grounds on which a party in English legal proceedings can claim to be entitled to withhold the production of material in its possession to the other side. One of those grounds is legal professional privilege, which has two sub-categories: (a) legal advice privilege and (b) litigation privilege. Legal advice privilege can be claimed only if the communication takes place between a lawyer and his/her client. There is no such requirement for litigation privilege and communications between either a lawyer or his/her client and a third party can be caught by the privilege. For this reason, it is wider in scope than legal advice privilege. However, two pre-conditions must be met before litigation privilege can arise.
The communication must be made:
- when litigation is in reasonable contemplation or has been commenced; and
- for the dominant purpose of obtaining information or advice in connection with, or of conducting or aiding the conduct of, such litigation.
Various issues relating to both legal advice and litigation privilege were considered in a recent High Court decision. In Property Alliance Group Ltd v The Royal Bank of Scotland Plc1, the underlying dispute related to the manipulation of LIBOR (in respect of which the defendant has already reached certain settlements with various regulators). The claimant sought disclosure of various "high level" documents from the defendant. The defendant claimed privilege over several of these documents and the following issues arose:
1. Could legal advice privilege be asserted over documents produced by an Executive Steering Group ("ESG") set up by the defendant?
Although not a sub-committee of the Board, it was "plainly an important committee operating at the highest levels". The claimant sought to rely on a statement by Richards J in Financial Services Compensation Scheme Ltd v Abbey National Treasury Services Plc2 that board minutes are a "common example" of a document which is "clearly not privileged".
However, Birss J held that the key question was the precise nature of the role undertaken by the ESG. Here, it was likely that the ESG had reported factually about the outcome of investigations and so it was "hard to credit" that its sole purpose had been to provide legal advice, notwithstanding the involvement of the defendant's solicitors with the work of the ESG. Accordingly, the judge ordered inspection of these documents by the court in order for the issue of privilege in these documents to be decided.
2. Could litigation privilege be claimed over certain documents?
The claimant argued that litigation privilege could not arise where an inquiry was being conducted to get to the bottom of the facts (and hence could not be said to be adversarial litigation). The judge did not need to decide this point, though, since all the documents in question were already covered by legal advice privilege.
Although there is disagreement between academic authors on this point, Birss J held that "it would not be unreasonable for a lawyer to approach claims to privilege on the basis that the litigation privilege and legal advice privilege overlap" and are not mutually exclusive.
3. Could without prejudice privilege be claimed over communications between the defendant and regulators?
The claimant argued that without prejudice cannot be claimed in the context of a regulatory investigation resulting in a finding of misconduct and the imposition of a penalty. That argument was rejected by the judge, who found that "the public policy on which the without prejudice privilege rule is based is capable of applying in order to promote settlement of FCA investigations". However, the privilege cannot be maintained where (as here) the firm puts in issue before a court the basis on which a Final Notice was produced.
4. Waiver: The defendant had provided certain documents to a regulator
As is common, those documents were provided on the basis that confidentiality and privilege would be preserved, although there were "carve-outs" to preserve the rights of the regulator to make further disclosure in the performance of its statutory duties or as otherwise required by law. The judge agreed that privilege could be claimed by the defendant over these documents and "that should not be undermined by the existence of the carve outs". The documents had been provided on only a limited basis.